Will Flipkart pull off a blockbuster sale with exclusive products?

This festival season is the most significant ever period for Indian e-commerce companies, particularly for Flipkart, which is trying to revive sales growth and win back market share from Amazon. Photo: Hemant Mishra/Mint

Bengaluru: Online marketplace Flipkart Internet Pvt. Ltd has lined up exclusive partnerships with key smartphone and television brands for its flagship Big Billion Day sale, a move that may give a leg-up to the company in its market share war with arch-rival Amazon India next month.

Flipkart’s big smartphone wins include Samsung’s Galaxy On8, Motorola’s E3 Power and Xiaomi’s Redmi 3S. Its important TV exclusives include BPL and LeEco.

Additionally, Flipkart and Infibeam were named the only two online resellers of Apple Inc.’s latest iPhone, although it’s not clear if this prohibits other e-commerce firms including Amazon from sourcing the phone from other Apple distributors. The iPhone’s launch is expected on 7 October.

To be sure, earlier this month, Flipkart lost exclusivity over LeEco, one of its largest-selling smartphone brands. It has exclusivity with VU TVs, its largest-selling TV brand, but Amazon and others have still found ways to offer the brand on their platforms.

Amazon (Amazon Seller Services Pvt. Ltd) has struck its own attractive exclusive smartphones deals such as Lenovo Z2 Plus, HTC Desire 10 and OnePlus 3. In all, Amazon said it has 57 exclusive smartphone partnerships, though a majority of these phones were launched several months ago.

Flipkart’s exclusive offerings in smartphones and TVs are important because electronics is the single biggest category in e-commerce. In October 2015, electronic products accounted for roughly 70% of gross sales at e-commerce firms, according to market researcher RedSeer Management Consulting Pvt. Ltd. Within electronics, smartphones are by far the dominant product category, followed by TVs.

“The key categories will be smartphones, fashion and large appliances, and whoever dominates these will come out as the winner in October,” said Mrigank Gutgutia, engagement manager at RedSeer. “The hope is that the e-commerce market as a whole will benefit by the addition of new users. We are estimating that monthly users will increase by 20-30% next month.”

Flipkart also has an edge over Amazon because of its ownership of fashion retailers Myntra and Jabong. Fashion contributed about 20% of the gross sales at e-commerce firms last year, according to RedSeer. Myntra said it expects daily sales to increase by five times in the Big Billion Day week.

Flipkart and Amazon will face off in the first week of October with their respective sale events, Big Billion Day and Great India Festival. This festival season is the most significant ever period for Indian e-commerce companies, particularly for Flipkart, which is trying to revive sales growth and win back market share from Amazon.

The US-based online retailer generated higher sales than Flipkart on a standalone basis for the second consecutive month in August, setting the stage for the festival season, the outcome of which could well determine the future of Indian e-commerce firms, Mint reported on 12 September. Including Myntra and Jabong, Flipkart was still ahead of Amazon in the two months.

While Flipkart lagged behind Amazon in gross sales in July and August, it finally saw a pick-up in sales growth in these months, indicating that the turnaround efforts of CEO Binny Bansal and Kalyan Krishnamurthy, business and advertising head, are finally yielding improved results. If the company has a successful October, it may get the platform to keep improving its results and raise a fresh round of funds.

“Big Billion Day is the biggest sale event of the year in India when millions of new shoppers browse online and we convert many of them into customers,” said Flipkart marketing head Samardeep Subandh. “The intent is to expand the market with Big Billion Day. We have run an extensive marketing campaign and our aim is to reach 30-40% more people with it compared with the campaign for last year’s Big Billion Days.”

Subandh declined to disclose the company’s sales targets for October. In last year’s Big Billion Day week, Flipkart generated about Rs2,000 crore in gross sales.

Amazon, too, expects user traffic to grow “multifold” this festival season, a spokesperson said by email. “We have 200% more sellers (compared with last October); we have thrice the selection and we have 1.5 time more fulfilment capacity. We expect millions of new customers to shop on the sale and experience Amazon.in for the first time..,” the spokesperson said.